On the relative strength of the NDX vs. the S&P:
Does anyone have a chart handy, or an online chart page, that plots the ratio of NDX vs. SPX? As we know, the multi-year trend has be benn that the hi-tech laiden NDX (MSFT, INTC, DELL, WCOM to name a few) has outperformed the S&P (and the S&P has been no slouch). However, starting in about Nov-98, the NDX went on a tear and significantly outperformed the S&P. Recently, as the market has been chopping sideways, the NDX backed off a bit on relative strength basis vs. the S&P. Seeing this in a chart form may give us a clue as to market direction, if you take the theory that the techs. lead the way up, they may lead the way down.
I've been considering the merits of short QQQ's (NDX 100 SPDR's), and going long SPY's in some proportion, with the expectation that the NDX 100 tech. stocks cool off a bit, and the S&P 500 strengthens ... but I can't make a fundamental case for that except that the NDX has moved too far, on an RS basis. I guess Soros could help me out when he unwinds his NASDAQ 100 position that he reportedly took in Q4-98, but George just never writes me anymore to tell me when he's getting ready to make his next move. :)
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